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“There are two things you are better off not watching in the making: sausages and econometric estimates. This is a sad and decidedly unscientific state of affairs we find ourselves in. Hardly anyone takes data analyses seriously. Or perhaps more accurately, hardly anyone takes anyone else’s data analyses seriously.” That is the scathing critique that .. MORE
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Public Choice Theory
People respond to incentives. With some generous interpretation, this simple sentence summarizes the bulk of what you’ll learn in any good undergraduate economics course. The challenge, of course, is to realize that this is always true even when we might want it to not be. For example, imagine for a minute that you’re in a .. MORE
Human Capital
It was a fact universally acknowledged that a young man or woman in 1800s Lancashire could find gainful employment as a weaving apprentice. In the pre-factory cottage industry, a weaving family would typically own one handloom. With the dawn of mechanised wool spinning, plenty of jobs became available for the young and willing to upskill. .. MORE
International Trade
The United States, like most other countries, use a method of double-entry accounting to track certain aggregate statistics known as National Income Accounting. One of the statistics tracked is the balance of trade. The balance of trade reports the difference between imports and exports. When imports exceed exports, we are said to have a trade .. MORE
Microeconomics
Economists like to draw triangles. In trade, you can’t have high tariffs, no retaliation, and unchanged prices. In monetary policy, you can’t fix interest rates, fix the money supply, and promise perfect stabilization. In hiring under unequal starting conditions, there is a similar triangle that most debates about fairness in hiring glide past. When firms .. MORE
Economic Methods
“There are two things you are better off not watching in the making: sausages and econometric estimates. This is a sad and decidedly unscientific state of affairs we find ourselves in. Hardly anyone takes data analyses seriously. Or perhaps more accurately, hardly anyone takes anyone else’s data analyses seriously.” That is the scathing critique that .. MORE
Incentives
Why do factory seals matter? If you look at trading cards on eBay, you’ll find that factory-sealed sets, packs, and boxes command a premium over anything opened. If you have listened to any episode of EconTalk featuring Michael Munger, you will know that “the answer is transaction costs.” You probably understand why: the factory seal .. MORE
Adam Smith
Much of Adam Smith’s writing in An Inquiry into the Nature and Causes of the Wealth of Nations (WN) is concrete. He explores examples of contemporary and ancient economic, political, religious, and military situations to better understand the world he lived in. As a result, his commentary touched on the economic situations of many nations. .. MORE
Adam Smith
The Wealth of Nations is a true classic of English literature. It is just not one that has ever been widely loved or popularly read. When The Wealth of Nations was published in 1776, Thomas Strahan, its publisher, said “the sale … has been more than I could have expected from a work that requires .. MORE
Adam Smith
This month marks the 250th anniversary of Adam Smith’s magnum opus, The Wealth of Nations. The Liberty Fund print edition is 950 pages (excluding material added by the editors) and just about every page is chock full of wisdom. While there are some flaws, we rightfully celebrate this book as the monumental leap forward to .. MORE
Trade is not just about transactions. It’s about relationships and trust built and earned over time. Just over a year ago, citing the International Emergency Economic Powers Act (IEEPA), President Trump began unilaterally changing tariff rates with countries around the world. The goal was to restructure global trade. Since this was the first time any .. MORE
Any book that intends to provide a complete account of a chapter covering almost 70 years in the history of ideas is an ambitious achievement by itself, especially when it is centered around a fuzzy concept like neoliberalism. If such a book also attempts to cover decades of economic history, discussing the evolution of policymaking .. MORE
Beginning on July 1, 2020, the United States-Mexico-Canada Agreement (USMCA) superseded the North American Free Trade Agreement (NAFTA) as the trade deal among the three countries.1 Unlike NAFTA, which only included a transparency provision, the USMCA contains specific measures aimed at fighting corruption. This addition demonstrates a shared commitment among the participating nations to enhance .. MORE
Yet the argument of Book V of Wealth of Nations is something quite different. Over hundreds of pages, Smith patiently shows why both peace and a tolerable administration of justice are historically rare, and continually fragile. To the extent that some society or other happens to have them, it seems to be neither the natural .. MORE
This is very interesting. Thank you for sharing this write up. As an economist, I’m heartened to see the profession doing well relative to others. One concern I have is related to the business, psych,..
Alex S., May 8